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What Makes a Dividend “Safe”? 3 Metrics Every Investor Should Watch
The Smart Investor·2025-10-31 07:30

For many investors, dividends are a main driver of why they buy stocks. Steady cash flow and compounding returns are hard to resist. However, while a high dividend yield might look tempting, it could also be a warning sign. Dividend payouts need to be backed by solid financial fundamentals for them to be safe.That said, there is no single metric that guarantees stability. Instead, investors can use these three indicators as essential checkpoints: Free Cash Flow (FCF), Balance Sheet Strength, and the Payout ...